Relates to the joint underwriting association.
Ayes (62): Adams, Addabbo, Avella, Ball, Bonacic, Boyle, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Espaillat, Farley, Felder, Flanagan, Fuschillo, Gallivan, Gianaris, Gipson, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Hoylman, Kennedy, Klein, Krueger, Lanza, Larkin, Latimer, LaValle, Libous, Little, Marcellino, Marchione, Martins, Maziarz, Montgomery, Nozzolio, O'Brien, O'Mara, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Sanders, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Tkaczyk, Valesky, Young, Zeldin
Excused (1): Sampson
TITLE OF BILL: An act to amend the insurance law, in relation to the joint underwriting association
PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to amend the insurance law to reduce the administrative burden of having NYPIUA report to the Department of Financial Services (DFS) on an annual basis regarding the number of broad form policies written by the association as well as reduce the burden of the DFS to report annually to the Governor and Legislature.
SUMMARY OF SPECIFIC PROVISIONS: This bill would amend section 5402 of the insurance law to require NYPIUA to report to the Department of Financial Services regarding the number of broad form policies written at the end of NYPIUA's ten year authority to write such policies rather than on an annual basis. The bill would also require DFS to report to the Governor and the Legislature no later than January 1st, 2018, regarding the number of policies issued, including any recommendations as to the continuation of such offerings.
JUSTIFICATION: In 2008, NYPIUA was given the authority to offer broad form coverage (DP-2) on personal dwelling and tangible personal property for a period of five years in addition to basic form (DP-1) that covers property damage from fire and other basic perils. The broad form policy covers damage from falling objects; weight of ice, snow or sleet; accidental discharge of water or steam; freezing; damage from artificially generated electrical current; volcanic eruption; and burglary, in addition to the basic coverage of a DP-1 policy.
In December, 2012, the DFS reported to the Governor and Legislature that NYPIUA had issued more than 30,000 broad form policies and that such a policy "provides enhanced coverage options to policyholders compared to the basic form policy and represents a meaningful improvement for homeowners who cannot obtain a homeowners policy in the voluntary market." The report also states: "Continuation of the broad form policy is an essential means by which NYPIUA can fulfill its mission."
NYPIUA has reported to the DFS on an annual basis since enactment of the 2008 amendments authorizing broad form coverage. As the DFS report points out, offering expanded broad form coverage has been beneficial to New York homeowners.
Requiring NYPIUA to continue to provide annual reports is unnecessarily time consuming and takes valuable personnel away from their day to day duties of working with homeowners trying to obtain property insurance. Requiring NYPIUA to provide a report on broad form coverage at the end of their ten years of authority is sufficient to assess the program.
PRIOR LEGISLATIVE HISTORY: This is new legislation.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.
EFFECTIVE DATE: This bill will take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 5236 2013-2014 Regular Sessions IN SENATE May 14, 2013 ___________Introduced by Sen. SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law, in relation to the joint underwriting association THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subsection (g) of section 5402 of the insurance law, as amended by section 1 of part W of chapter 55 of the laws of 2013, is amended to read as follows: (g) In addition to fire insurance, extended coverage, coverage for additional perils and homeowners insurance should the same be made available through the association in accordance with a determination of necessity pursuant to section five thousand four hundred twelve of this article, the association may offer broad form coverage to applicants seeking to insure real property at fixed locations of this state, or the tangible personal property located thereon. The association may offer broad form coverage for a period of ten years beginning on June thirti- eth, two thousand eight.
[The]ON OR BEFORE OCTOBER FIRST, TWO THOUSAND SEVENTEEN THE superintendent shall require the association to report to him or her [annually during that ten-year period]as to the number of policies written pursuant to this subsection and paragraph three of subsection (f) of section five thousand four hundred five of this arti- cle [in the previous year], and any other information the superintendent may require. [The superintendent shall then report to the governor and the legislature regarding the number of policies issued pursuant to this subsection and such paragraph annually for the first nine years such coverage is offered.]On or before January first, two thousand eighteen, the superintendent shall [make a final, cumulative]report to the gover- nor and the legislature [which]REGARDING THE NUMBER OF POLICIES ISSUED PURSUANT TO THIS SECTION AND SUCH PARAGRAPH AND shall include recommen- dations as to the continuation of such insurance offerings. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10992-01-3